Suzuki Motor has announced plans to invest JPY60bn (US$548m) in a new vehicle assembly plant in the Indian state of Gujurat, according to reports in Japan.

The facility is scheduled to become operational in 2020 and will have an annual production capacity of 250,000 vehicles per year. It will be the third vehicle assembly to be operated by the Japanese carmaker’s wholly-owned Indian subsidiary, Suzuki Motor Gujurat (SMG).

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SMG was established in 2014 and its first vehicle plant was completed in early 2017, currently making the Baleno and the Swift sub-compact cars. The company’s second plant became operational last week, also producing the Swift model and related powertrains.

The third plant will lift SMG’s production capacity to 750,000 vehicles per year and will produce passenger vehicles for the sale domestically and for export.

The Japanese automaker had previously revealed plans to begin testing electric vehicles in India in late 2018, but pointed out that significant investment needs to be made in recharging infrastructure for this segment to become popular here. Suzuki is currently planning to launch EVs commercially in India in 2020.

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This latest investment will lift Suzuki’s annual four-wheeled vehicle production capacity in India to 2.25 million units, including 1.5 million units at its Maruti Suzuki India joint venture in which it has a 56.2% shareholding.

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India is Suzuki’s largest four-wheeled vehicle market worldwide with sales amounting to 1.75m units in 2018, equivalent to around 50% of the local light vehicle market, and production of 1.87m units.

Suzuki expects the Indian vehicle market to expand to around 10m vehicles by 2030, so significant new investment will be needed for it to protect its market share.